Class Action Alleging Excessive Bank Overdraft Fees Can Go Ahead

Evansville, INAn excessive bank overdraft fees lawsuit originally filed in 2010 is finally scheduled to go to trial later this month in Vanderburgh Circuit Court in the state of Indiana following various delays stemming from Old National Bank’s various efforts to have the lawsuit tossed.

Old National Bank is based in Evansville, Indiana. Three former customers of Old National Bank filed a proposed class action, accusing the bank of posting and arranging transactions in such a way as to inflate bank overdraft fees. The three plaintiffs - identified as Steven Kelly, Jon Cook and Rebecca Cook - were initially rewarded by a ruling from Circuit Court Judge David Kiely that the proposed bank overdraft fees lawsuit could move forward as a class-action lawsuit.

The defendant appealed the ruling to the Indiana Court of Appeals, which - this past April - affirmed the ruling of the lower court. Old National Bank then took its case to the Indiana Supreme Court, which refused the defendant’s petition to hear arguments in the case.

That decision by the Supreme Court automatically upholds the lower court’s ruling, allowing the banking overdraft fees lawsuit to move ahead. The lawsuit is scheduled to go to trial later this month, on October 27. The case will be heard by a judge, who will render a decision without the participation of a jury.

The three plaintiffs in the excessive overdraft fees lawsuit accused Old National Bank of breach of contract in arranging and posting transactions in such a way as to maximize fees, or so it is alleged. The appeals court agreed that the defendant had a right to charge overdraft fees, but was not authorized to ignore state law. Old National Bank attempted to invalidate the plaintiff’s claim. However, the appeals court ruled that Old National Bank had not shown that the plaintiff’s claims with regard to breach of contract were invalid.

The judges wrote: “We cannot, by examination of the contract and with reference to undisputed facts, conclude that the deposit agreement unambiguously and consistently provides for the sums actually charged by the bank. Summary judgment is inappropriate where, as here, a fact finder could infer from the designated materials that the bank breached its duty of good faith and fair dealing.”

The defendant did score a few “wins” in the decision. Appeals Court Judges L. Mark Bailey, John Baker and Margaret Robb dismissed allegations of conversion, unconscionability and unjust enrichment claims that alleged Old National Bank intentionally exerted unauthorized control over deposits, as well as a claim that the bank violated the Indiana Crime Victim Relief Act.

“We are aware of no substantive cause of action in Indiana to recover monetary damages for drafting or enforcing an unconscionable contract term,” the judges wrote.

Still, even with that bit of wind out of their sails, attorneys for the plaintiffs say they are looking forward to proceeding with the lawsuit, given the plaintiff’s assertions that arranging transactions from high to low in order to maximize fees and penalties without the customer’s knowledge is quite simply, wrong…